Pet insurance, like its human equivalent, is going to vary from animal to animal. Different breeds, animals, and ages all have different rates. For many, the reason to have pet insurance is for the assurance they won't have to make the choice between a $5,000 operation and a $50 shot to put the animal down because they don't have the cash. Let's start by taking a look at what types of situations pet insurance covers.

What It Does and Does Not Cover

Pet insurance can be as confusing as your own health insurance in what it covers. The difference is that a lot of the coverage depends on the breed of animal, so it's good to research the policy and your animal's history at the same time. PetMD is a good resource of articles to find your pet's history.

What Most Cover

Diagnostic tests.

Surgeries.

Medications.

Treatment.

What Most Don't Cover

Some policies don't cover dental.

Most don't cover preexisting or hereditary conditions.

These vary from policy to policy, so pay close attention the terms when you're researching. The hereditary conditions one in general is difficult to define, so talk to your vet about potential problems before choosing an insurance plan. If you have an "exotic" animal like a horse, lizard, or parrot, you may need to search for special insurance companies.

How to Pick out the Right Insurance

The cheapest monthly rate I was able to find for a 12-year-old cat was $11.45/month but it had a $1,000 deductible and only covered accidents. Another plan, with a $500 deductible was over $300 a year, which collectively is more than I've spent on the cat's healthcare in its entire lifetime.

The biggest issues to watch out for if you're going to pick a pet insurance are service related. Not all companies are the same and many have exclude specific treatments or pay different percentages on different procedures, so read the policy as carefully as you would your own. Many also vary deductibles based on the incident type and treatment, which makes planning difficult.

I talked with several veterinarians, who seemed to unanimously recommend Petplan and VPI Pet Insurance (although WiseBread has another take on VPI). For what it's worth, Petplan is more expensive, but lets me select my reimbursement percentage and deductible, and then covers loss, kennel fees, and more. They also have a handy calculator so I can see if it's really worth it.

Assuming the treatments were all covered, for their bottom tiered, Bronze plan, I would pay $1,300 on a $6,000 bill that cost about $27 a month, which isn't too bad. The problem is there's probably nothing that could possibly happen to this cat that would cost $6,000, so let's drop it down to a $700 bill. Now, my share of the costs is $340. So, that's $340 right there, plus the $324 in monthly payments I've made, which is $664, a savings of $36, assuming all costs were covered. Below that $700 mark, the savings disappear and considering the average vet bill last year was around $500, it hardly seems worth it. Consumer Reports had similar findings earlier this year. Typically, dog and cat visits are similar in cost, with dogs being slightly more expensive because of their size, but the math doesn't work out either way.

Despite what the numbers say, the veterinarians I talked with were energetic about insurance and recommended it for animals of every size. There reasoning was that it offers peace of mind and works as a savings plan for larger bills that may come down the line. From a veterinarian's perspective, it also means they'd likely have to put down less animals due to cost issues. However, two of the offices mentioned they usually send the entire bill to the insurance company because, "you never know what might get covered," which seems to accent the biggest problem with pet insurance, the unknowable outcomes of claims.

If you'd still like to go for it, we didn't find any solid price comparison sites, but aside from the two mentioned above, popular and well-rated insurance companies also include Trupanion and 24PetWatch. Some home and car insurance may offer discounts on select companies as well, so be sure to check with them first.

Alternatives to Pet Insurance

If you don't like the idea of pet insurance, there are alternatives, but they'll require a more proactive approach on your part. The first thing you'll need to do is research your pet and see what types of common, hereditary ailments they might run into and call your vet and ask for rough estimate on cost. With these in hand, you can create a makeshift hypothetical payment plan for yourself. You'll also want to include problems like potential broken bones and dental care. You can use whichever budgeting technique you prefer, but most of our favorite money management sites allow for this type of planning.

As for the care itself, you want to shop around for the best deals. They're going to vary depending on your location, but many larger cities have cheaper, non-profit clinics or universities that are willing to work with you on prices and payments if necessary. These often run a first-come first-served system, so be prepared to potentially spend a lot of time in the office. Most of these types of places also have low-cost annual visits and medications as well, but they typically don't handle major chronic maladies.

The benefit of animal insurance is going to come down to your location, the type of pet, and the lifestyle. If your animal roams the streets freely, it's going to be more prone to accidents and might be worth it. If your animal remains healthy for its life and doesn't have any major medical conditions, the insurance absolutely will not be worth it. Even if your pet does have a major surgery, say $4,000 once in its lifetime, you will still be breaking even in a best case scenario. Pet insurance is geared more toward people who don't want to set up a separate fund to cover health costs, or who want the peace of mind that comes from insurance. If that's you, all we can say is research your potential plans extensively before choosing one.

Love,
Lifehacker

P.S. Have you used pet insurance? Do you feel like you get what you pay for?